One of the central points in the ideological struggle between the capitalist class and the working class is the question of what kind of economic system is required to insure the well-being of the people as well as economic development and the progress of society. The capitalists, supported by the propaganda machine of the mass media as well as the government, insist that the "free market" system is the best of all possible economic systems.

The theory of "free market" economics claims that if the capitalist owners, each pursuing the selfish aim of maximizing profit, are left to their own devices, then the "invisible hand" of the market will create an equilibrium of supply and demand in such a way as to stimulate all-around economic development.

In other words, according to the theory of "free market" economics, society as a whole – all human beings – must not be allowed to plan economic life on the basis of insuring the well-being of all members of society, but rather, allow the economy to be regulated by the unknowable force of the "invisible hand." In this respect, the "free market" theory attempts to negate the fundamental human capacity to consciously transform the natural and social environment in order to create a society fit for human beings. And of course, behind the free market's "invisible hand," the real "regulator" of the economy remains the profit-drive of the capitalists.

History and present-day reality provide the best refutation of this theory – showing just what happens to human beings when they remain subjected to the "blind forces" of market competition.

Amongst other things, the history of "free market" capitalism is a history of continuous economic cycles of "boom" and "bust." In the recurring periods of recession and depression (which today have become prolonged and chronic), the "invisible hand" of market competition proves itself incapable of setting to work the vast productive machinery of society. On the contrary, instead of economic growth, part of the productive capacity of society is destroyed. Millions of workers are thrown out of their jobs, factories stand idle or operate far below capacity, "excess" commodities, and even "excess" industries, are actually destroyed. Why? Because the "free market" system organizes production on the extremely narrow basis of maximizing profit for a few and hence is unable to harmonize society's vast productive capacity with the limited consuming power of the majority of the population.

The inability of the "free market" system to develop the productive capacity of society and insure the well-being of the people has created a situation of worldwide and unresolvable economic crisis. In the U.S. today, officially 13.7 million workers are unemployed, and millions more can only find part-time jobs. Even during recent periods of economic "recovery" millions of workers could not find jobs and the wages and standard of living of the vast majority of the population continued to fall. On-going corporate downsizing and the continuous restructuring of the U.S. economy show that the capitalists can only employ aspects of the scientific-technological revolution on the basis of destroying the livelihoods of workers and keeping the majority of the population in a state of severe economic insecurity.

The theory of "free market" economics is a double and a triple fraud. On the one hand, the capitalists and their political frontmen insist on "free market" economics when the issue arises that the state must regulate some economic activity in order to guarantee the rights of the workers. Thus, for example, when the workers demand guaranteed employment or income-support, when the workers demand universal and free medical care, when the workers demand their right to a safe and healthy work environment, when workers demand union shops, etc. the capitalists scream that guarantying such rights will undermine the workings of the "free market." But, on the other hand, the capitalists themselves rely on the state to regulate the economy in the interests of the capitalists. Today in the U.S., the government accounts for about a third of the country's GNP. Through the military budget, through interest payments to the big bankers, through billions spent providing big corporations with research and development grants, etc., etc. the government actively intervenes in the economy, further re-distributing the wealth of society in favor of the capitalists and orienting the economic life of the country to insure maximum profits for the big monopoly groups. The monopoly capitalists are unwilling to leave their profits to chance or the "invisible hand."

Thus, in sum, what really stands behind the slogan of "free market" economics is the demand that everything in society be subordinated to the drive of the big monopolies to maximize profits – that the capitalists be freed from any restraint in their drive to more thoroughly exploit the workers, that the workers be stripped of any and every economic right. At its root, "free market" economics is merely an attempt to justify an economic system in which the means of production (the tools created by human beings for the production and reproduction of the material means of subsistence) are monopolized in the form of private capitalist property and in which the entire aim of economic life is to maximize profit for these private owners through the exploitation of the working people.

In waging the ideological struggle to expose what lies behind the propaganda about the "free market" system, the working class also enunciates the political economy of socialism.

The worldwide and permanent crisis of the capitalist economy proves that this economic system is unable either to secure the economic well-being of the people or to guarantee the continuous development of the productive forces of society. The productive forces themselves – which include the working class, the class whose labor produces all the new material blessings of society – is demanding a new way of organizing economic life. The working class insists that the aim of economic life must be to guarantee the well-being of all members of society, to guarantee the economic rights of the masses of the people. The socialist economic system, proceeding from this principle, harmonizes the interests of the individual members of society and of each collective within the society with the economic and social advancement of society as a whole. On the basis of continually raising the economic and cultural well-being of the people, the socialist system allows for planned economic development and the continuous expansion of the productive forces of society. The entire experience of the last 150 years – both the experience of the struggles to gain certain partial economic rights within the capitalist system as well as the positive experience of socialist societies – proves that putting the rights of the people at the center of economic life is the decisive factor in creating a humane economy and for the harmonious, uninterrupted progress of economic and social life.